Keynes assumed the situation of
Full employment
Under employment
Involuntary unemployment
Marginal unemployment
The fraction of a change in income that is consumed or spent is called:
The marginal propensity of expenditure
The average propensity to consume
The marginal propensity to save
The marginal propensity to consume
In the equation C = a + bY, which describes the aggregate consumption function, 'b' stands for?
The amount of income when consumption is zero
The amount of consumption when income is zero
The average consumption level
The total quantity of an economy's final goods and service demanded at different price levels is
The aggregate supply curve
The aggregate demand curve
The Phillip's curve
The aggregate expenditure function
The aggregate demand curve is downward sloping because
A lower price level, holding the nominal quantity of money constant, leads to a larger quantity of money in real terms causes the interest rate to fall, and stimulates planned investment spending
A lower price level, holding the nominal quantity of money constant leads t a larger quantity of money in real terms, causes the interest rate to fall, and stimulates planned investment spending
A higher price level, holding the nominal quantity of money constant
A higher price level holding the nominal quantity of money change
The central problem in Macro Economics is
Income and employment
Price and Output
Interest and Money
Unemployment
The Classical Theory assumed the existence of
Disguised unemployment
Under-employment
As the MPS increases, the multiplier will:
Decrease
Increase
Either increase or decrease depending on the size of the change in investment
Remain constant
The Marginal Propensity to Consume
ΔS/ΔY
C/y . ΔP/ΔQ
ΔP/ΔQ
ΔC/ΔY
Aggregate supply is the total amount
Produced by the government
Of goods and services produced in an economy
Of labour supplied by all households
Of products produced by a given industry
